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NLRB Acting General Counsel Sheds Light on Lawful "At-Will" Clauses

November 7, 2012 | Author: Stuart R. Buttrick

Law Firm: Faegre Baker Daniels - Indianapolis Office

The Acting General Counsel (AGC) of the National Labor Relations Board (NLRB) issued two reports on October 31, 2012, providing guidelines for what the AGC believes are lawful "at-will" employment clauses. Based on these recent reports reviewing employment at-will clauses from two companies, Rocha Transportation and Mimi's Café, the AGC takes the position that at-will clauses are lawful when the employer limits the company representatives with the authority to change employees' at-will relationship, but does not require employees to agree that the employment relationship cannot be changed.

Employers' at-will clauses have recently been challenged as violating Section 8 (a)(1) of the National Labor Relations Act (NLRA). Section 7 of the Act provides that all workers - and not just workers in labor unions - may engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection." Generally, two or more employees acting together to address a collective employee concern about terms and conditions of employment is considered protected concerted activity. An employer violates Section 8 (a)(1) of the Act by maintaining a work rule or policy that would "chill" employees in their exercise of their Section 7 rights.

The question of whether employment at-will clauses violate the NLRA has been garnering attention since earlier this year when an NLRB administrative law judge found an American Red Cross unit's at-will relationship disclaimer to be unlawfully broad. The American Red Cross' at-will clause required the employees to agree "that the at-will employment relationship cannot be amended, modified or altered in any way." The administrative law judge found that the signing of this acknowledgment form was a waiver of the employees' right to organize.

In contrast, the at-will employment clauses reviewed in the AGC's most recent reports did not expressly bar employees' at-will relationship from being altered. The Rocha Transportation clause prohibited a "manager, supervisor or employee" from entering into an employment agreement with an employee for an arrangement other than at-will. Similarly, Mimi's Café's at-will clause barred any "company representative" from entering into any employment agreement with an employee other than at-will. The AGC stated that neither of these clauses contained overly broad language that could damper employees' exercise of their Section 7 rights because these clauses did not stop the employees from seeking to change their at-will status. Instead, the clauses only limited the individuals who, on behalf of the employer, had the authority to change employees' at-will status.

The distinction between the lawful and unlawful at-will clauses is a fine one. However, the reports issued by the AGC give employers clarity as to what language should be incorporated so that their clauses are not viewed as overly broad.

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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